Scholars unanimously agree that bank interest is riba (usury), and any attempt to draw superficial distinctions to justify what Allah has prohibited is futile.

Sheikh Muhammad Abu Zahra states: ⁽¹⁾ “The system of interest, which is riba, is not forbidden in Islam alone among the divinely revealed religions. It is also prohibited in the two preceding religions, Judaism and Christianity. Usury is forbidden in the Torah, the Bible, and the Quran—not in the Quran alone. There remains evidence of this prohibition in the Torah we have today, even if they have forgotten parts of what they were reminded of. In Deuteronomy, chapter 23, it is stated: 'You shall not charge interest on loans to your brother, interest on money, interest on food, interest on anything that is lent for interest.'”

He further explains: ⁽²⁾ “The riba mentioned in the Quran is the same as the usury practiced by banks and dealt with by people. It is undoubtedly forbidden.”

Some might mistakenly believe that the term “interest” was unknown to Islamic scholars of old and only emerged with the advent of modern banks. This is a misconception refuted by historical evidence. Islamic scholars have long recognized the term “interest” and explicitly declared it forbidden. In the Fatawa of Sheikh al-Islam Ibn Taymiyyah, ⁽³⁾ it is mentioned: “A man in need of a loan could only find someone willing to lend him money in exchange for interest.”

Similarly, in the Fatawa of al-Subki: ⁽⁴⁾ “As for the transaction practiced nowadays, where a person goes to the Office of Orphans requesting, for instance, a loan of one thousand and agrees to an interest of two hundred or more or less, this is undoubtedly forbidden.”

These classical and contemporary juristic texts affirm that bank interest is the forbidden usury, a ruling not derived after the establishment of banks but rooted in Islamic tradition. In the introduction to his book Research on Usury, Sheikh Muhammad Abu Zahra asserts that interest is prohibited usury in Islam, Judaism, and Christianity. He further cites Christian theologians confirming the prohibition of bank interest, noting that the spread of usury in Europe stemmed from several reasons, among which economists misleading religious figures by portraying low-interest rates as administrative fees. This tactic is akin to modern efforts to deceive Muslim scholars and devout individuals. ⁽⁵⁾

Why Bank Interest Is Worse Than Pre-Islamic Usury

Riba (Usury) is the exchange of money for money with an increase. If the increase is immediate, it is called Riba al-Fadl. If the increase is deferred, it is referred to as Riba al-Jahiliyyah, the most severely prohibited form of usury. It is also called Riba al-Qur’an, as it is explicitly forbidden in the Qur’an. The entire Muslim Ummah has unanimously agreed on the prohibition of Riba al-Jahiliyyah. However, bank interest is far worse and more abhorrent than Riba al-Jahiliyyah for several reasons:

1. During pre-Islamic times, loans involved actual tangible money, such as gold dinars and silver dirhams. Modern banks, however, not only lend out existing deposits but also charge interest on money they create through credit or fictitious capital. This means banks charge interest on money they neither possess nor own—money that doesn’t exist in reality. Economists are well aware of the relationship between money creation, inflation, and price increases, and they understand the dangers this poses to the economy. ⁽⁶⁾
2. In Riba al-Jahiliyyah, both parties entered into agreements voluntarily. Al-Jassas states in Ahkam al-Qur’an: ⁽⁷⁾ “The usury known and practiced by the Arabs was the lending of dirhams and dinars for a period with an agreed-upon increase, based on mutual consent.”
   Thus, Riba al-Jahiliyyah was conducted with mutual agreement between the parties, whereas the interest in banking transactions is imposed unilaterally by the bank without the borrower’s consent.
3. If you borrowed a million of any currency during pre-Islamic times, the full amount would be given. In contrast, modern banks deduct 10% or 20% of the loan amount upfront. For example, the bank might give you 900,000 or 800,000 while labeling the loan as a million, and then charge interest of 20% or more, depending on the rate set by the central bank. Hence, the bank does not disburse the full million but collects it back with an added interest.
4. In pre-Islamic times, loans were primarily investment-oriented, often used for trade, agriculture, or livestock rearing. Today, most loans are consumption-based. Additionally, modern banks are predominantly commercial institutions that borrow to lend, with very limited involvement in actual investment activities.

Numerous resolutions and fatwas have been issued by Islamic Fiqh bodies, unanimously declaring the prohibition of bank interest. Among them are the following notable examples:

1. The Second Conference of the Islamic Research Academy at Al-Azhar
   Held in Cairo in Muharram 1385 AH (May 1965), it was attended by 85 prominent scholars representing 35 Islamic countries. Its first resolution stated: “Interest on all types of loans is prohibited usury.”
2. The First International Conference on Islamic Economics in Mecca
   Convened in 1396 AH (1976), it brought together more than 300 scholars specializing in Islamic jurisprudence and economics. They unanimously agreed—without exception—on the prohibition of bank interest, categorizing it as unequivocally prohibited usury.
3. The Second Islamic Banking Conference in Kuwait Held in 1403 AH (1983), it confirmed the prohibition of bank interest.
4. Resolution of the Islamic Fiqh Council of the OIC at its second session in Jeddah, Rabi' al-Thani 1406 AH (December 1985), the council declared that any increase or interest charged on a debt after its due date because the borrower could not repay it, or interest agreed upon at the outset of a loan, constitutes prohibited usury.
5. Resolution of the Fiqh Council of the Muslim World League at its ninth session held in Mecca in Rajab 1406 AH (March 1986), the council ruled that all income derived from usurious interest is unlawful.
6. The Third Islamic Banking Conference in Dubai held in 1406 AH (1986), this conference reaffirmed the prohibition of bank interest.

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(1) Research on Usury, Sheikh Muhammad Abu Zahra, Dar al-Fikr al-Arabi, Cairo, 1420 AH/1999 CE, p. 5.
(2) Ibid., p. 22.
(3) Majmu‘ al-Fatawa, Ibn Taymiyyah (29/430), King Fahd Printing Complex, Medina, 1416 AH/1995 CE.
(4) Fatawa al-Subki (1/327), Dar al-Ma‘rifah, Beirut.
(5) Research on Usury, p. 10.
(6) Evaluating the Banking Experience, pp. 72–73.
(7) Ahkam al-Quran by al-Jassas (2/184), Dar Ihya al-Turath al-Arabi, Beirut, 1405 AH/1985 CE.

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Allah sent His messengers, revealed His books, and detailed the laws of His religion to establish comprehensive justice in all aspects of life, including economic, social, political, and military domains. Allah says, “We have already sent Our messengers with clear evidences and sent down with them the Scripture and the balance that the people may maintain [their affairs] in justice.” (Al-Hadid: 25) He also says, “Indeed, Allah orders justice and good conduct and giving to relatives and forbids immorality and bad conduct and oppression. He admonishes you that perhaps you will be reminded.” (An-Nahl: 90)

To achieve economic and social justice in an Islamic state, Islam has declared war against riba (usury). Many ayahs in the Quran and noble hadiths of the Prophet ﷺ categorically prohibit usury, considering it one of the major sins that bring ruin in this world and the Hereafter.

Bank interest is one of the clearest forms of riba that Islam has prohibited. The Muslim Ummah has reached a consensus on the prohibition of bank interest, and numerous fatwas have been issued by scholarly institutions and Islamic jurisprudential councils affirming its prohibition.

Despite the clarity of this prohibition, occasionally voices emerge—lacking strong scholarly foundation but supported by media—claiming that bank interest is permissible. They argue that it is a modern transaction not explicitly addressed in Islamic texts and that the default principle in transactions is permissibility unless explicitly forbidden.

To clarify the matter further, this article will outline the scholarly definition of riba, its types, and the classification of bank interest within these categories.

Definition of Riba

1. Imam Al-Zajjaj (d. 311 AH) defined riba in his tafsir ⁽¹⁾ as: “Riba is every loan from which more is taken in return or that entails a benefit.”
2. Another form involves lending money for a fixed period while taking a set amount monthly as interest. If the debtor cannot repay the principal amount when due, an extension is given with additional interest. This form of riba is prevalent in banks and other institutions in our countries today. Allah prohibited it for both Muslims and non-Muslims alike. ⁽²⁾

Types of Riba

Riba is of two types: Riba al-Nasi’ah, the riba practiced during pre-Islamic times (usury of delay) and Riba al-Fadl (usury of excess).

Riba al-Nasi’ah: In its definition Imam Al-Nisaburi said: In pre-Islamic times, people lent money for a set period, demanding a fixed amount each month. When the debt was due, they would demand the principal. If the debtor failed to pay, they extended the term with increased interest. ⁽³⁾

Al-Jassas said about Riba al-Nasi’ah: A delayed loan with a stipulated increase, where the increase serves as compensation for the delay.

Riba al-Fadl: This occurs when an item is exchanged for the same type but in unequal amounts and in hand-to-hand transactions, such as selling one gram of gold for two grams of gold in immediate exchange.

Ruling on Riba

Riba is categorically haram (prohibited) in the Quran, Sunnah, and by scholarly consensus.

In the Quran, there are many ayahs indicate its prohibition, such as Allah’s saying: “Those who consume interest cannot stand [on the Day of Resurrection] except as one stands who is being beaten by Satan into insanity. That is because they say, 'Trade is [just] like interest.' But Allah has permitted trade and has forbidden interest. So whoever has received an admonition from his Lord and desists may have what is past, and his affair rests with Allah. But whoever returns to [dealing in interest or usury] - those are the companions of the Fire; they will abide eternally therein. Allah destroys interest and gives increase for charities. And Allah does not like every sinning disbeliever. Indeed, those who believe and do righteous deeds and establish prayer and give zakah will have their reward with their Lord, and there will be no fear concerning them, nor will they grieve. O you who have believed, fear Allah and give up what remains [due to you] of interest, if you should be believers. And if you do not, then be informed of a war [against you] from Allah and His Messenger. But if you repent, you may have your principal - [thus] you do no wrong, nor are you wronged.” (Al-Baqarah: 275-279)

As from the Sunnah, there are many hadiths including:

Abu Hurairah reported that the Prophet ﷺ said: “Avoid the seven noxious things.” When his hearers asked, “What are they, messenger of God?” He replied, “Associating anything with God, magic, killing one whom God has declared inviolate without a just cause, devouring usury, consuming the property of an orphan, turning back when the army advances, and slandering chaste women who are believers but indiscreet.” (Agreed Upon)

Jabir said: “The Messenger of Allah (ﷺ) cursed the one who accepted usury, the one who paid it, the witness to it, and the one who recorded it.” (Narrated by Muslim, At-Tirmidhi, and Ahmad)

Bank interest corresponds precisely to the definition of riba. In fact, it aligns with the worst and most prohibited type of riba—Riba al-Nasi’ah prevalent during pre-Islamic times. This becomes even clearer when examining the definitions provided by economists for banks interests.

Banks Interests

Economists define interest as a fixed, predetermined percentage of the principal amount agreed upon in advance, which the debtor pays to the lender in return for using the money. It represents the lender's annual return or compensation for the delay in payment. ⁽⁵⁾

This definition accurately depicts the reality of modern banking practices. As such, Islamic scholars have declared that bank interest is identical to the prohibited riba mentioned in Islamic texts. In fact, it is considered even worse than the riba practiced during pre-Islamic times.

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1. Tafsir Al-Zajjaj (4/187), Alam Al-Kutub, Beirut, 1st Edition, 1408 AH/1988 CE.
2. The Book of Fiqh on the Four Schools of Thought (2/222), Abd Alrahman Al-Jaziri (d. 1360 AH), Dar Al-Kotob Al-Ilmiyah, Beirut, Lebanon, 2nd Edition, 1424 AH/2003 CE.
3. Tafsir Al-Nisaburi (2/60), Ed. Sheikh Zakariya Umairat, Dar Al-Kotob Al-Ilmiyah, Beirut, 1st Edition, 1416 AH.
4. Ahkam Al-Quran by Al-Jassas (2/186), Ahmad ibn Ali Abu Bakr Al-Razi Al-Jassas Al-Hanafi (d. 370 AH), Dar Ihya al-Turath al-Arabi, Beirut, 1405 AH.
5. Evaluating the Banking Experience, Dr. Abdul Hamid Al-Ghazali and Dr. Adel Eid, Dar Al Salam for Publishing & Distribution, Cairo, 1st Edition, 1434 AH/2013 CE, pp. 66–67.

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